Practical Management Science, Loose-leaf Version
Practical Management Science, Loose-leaf Version
5th Edition
ISBN: 9781305631540
Author: WINSTON, Wayne L.; Albright, S. Christian
Publisher: Cengage Learning
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Chapter 2, Problem 37P

a)

Summary Introduction

To determine: The market share needed to ensure a total free cash flow (FCF) of $0 over years 1 to 5.

Net present value (NPV):

NPV is the variance in the present value of cash entries and depletions. NPV is used to examine the profitability of a project over some time.

b)

Summary Introduction

To explain: The way through which an increase in market share changes the profit.

c)

Summary Introduction

To explain: The way through which an increase in market size growth changes the profit.

d)

Summary Introduction

To use: Excel’s auditing tool to show how the market growth assumption influences the spreadsheet.

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